SHANGHAI, May 19 (SMM) - This is a roundup of China's metals weekly inventory as of May 18.

SMM Weekly Updates On China Aluminium Ingot And Billet Social Inventories As Of May 18

Aluminium ingot: The aluminium ingot social inventories across China’s eight major markets stood at 706,000 mt as of May 18, down 81,000 mt from a week ago and 259,000 mt from the same period last year.  The inventories maintain a downward trend and remain at a low level. Judging from cargoes in transit and share of ingot output at smelters, the social inventory is on track to fall below 700,000 mt soon. However, aluminium ingot inventory will present less significance for reference as the proportion of non-ingot output at smelters is on the rise. Downstream demand was relatively poor.

Aluminium billet: The domestic aluminium billet social inventory stood at 162,000 mt as of May 18, down 6,600 mt from a week ago. Downstream purchases picked up after aluminium prices rebounded. Billet conversion margins were lowered amid rising aluminium prices, and market transactions improved noticeably. Billet production remains high amid growing molten aluminium supply, and downstream industry is entering the off-season, putting social inventory at risks of growing further.  The current inventory is significantly higher than in the same period of previous years. The inventory is expected to hover around the current level next week.

China Zinc Ingot Social Inventory down 5,500 mt from May 15

Zinc ingot inventories across seven major Chinese markets totalled 116,900 mt as of May 19, down 5,500 mt from May 15 and 7,200 mt from May 12. SMM survey showed that the inventory in Shanghai, Guangdong and Tianjin declined 3,500 mt. In Guangdong and Shanghai markets, the downstream companies purchased some goods when zinc prices dropped, and the spot arrivals were not high. The inventory in the Tianjin market also decreased, which was contributed by the decline in spot shipments from smelters and the average downstream demand.

Bonded Zone Inventory of Nickel Falls 200 mt from May 12

As of May 19, bonded zone inventory of nickel stood at 4,100 mt, down 200 from May 12. The inventory of nickel briquettes was 1,670 mt, and that of nickel plates was 2,430 mt. Spot transactions have picked up significantly owing to the low nickel prices and the downstream sectors' rigid demand for nickel plates. On the other hand, some imported pure nickel priced against LME nickel were cleared due to higher prices in China.

Lead Ingot Social Inventory is Expected to Remain Low

According to SMM research, as of May 19, the total social inventory of SMM lead ingots across Shanghai, Guangdong, Zhejiang, Jiangsu and Tianjin reached 28,800 mt, a decrease of 7,400 mt from May 12 and 5,500 mt from May 15.

According to the research, with the end of the delivery of the SHFE 2305 lead contract, the goods flowed back to the market and thus the lead prices declined at the begining of the week. As most enterprises purchased as needed, the lead ingot inventory declined. In addition, some primary lead smelters' maintenance plan in mid-May also tightened the supply, especially the supply of deliverable goods. Therefore, the lead ingot inventory is expected to remain low with further downside potential.

Silicon Metal Stocks Across China’s Three Major Markets Declined

SHANGHAI, May 19 (SMM) - Silicon metal stocks across China’s three major markets stood at 157,000 mt as of May 19, a drop of 3,000 mt from a week ago.

This week, the price of silicon fell sharply, with a drop of more than 700 yuan/mt.

Downstream buyers were more cautious about buying. Large silicon metal plants in north China cut offers sharply to promote sales. 

Inventory in Kunming remained stable. Stocks at Tianjin Port and Huangpu Port fell due to improved sales. Cargo inflows and outflows at Tianjin Port returned to normal this week after sharp declines.

Due to poor demand, the overall inventories remain high.